Classifying bounded rationality in limited data sets: A Slutsky matrix approach

Given any observed finite sequence of prices, wealth, and demand choices, we propose a way to measure and classify the departures from rationality in a systematic fashion, by connecting violations of the underlying Slutsky matrix properties to the length of revealed demand cycles. The approach complements our previous study (Aguiar and Serrano in J Econ Theory 172:163-201, 2017), which is based on the entire demand function. The methodology can be easily applied in experimental demand data sets.

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Year of publication:	2018
Authors:	Aguiar, Victor H. ; Serrano, Roberto
Published in:	SERIEs - Journal of the Spanish Economic Association. - Heidelberg : Springer, ISSN 1869-4195. - Vol. 9.2018, 4, p. 389-421
Publisher:	Heidelberg : Springer
Subject:	Consumer theory \| Rationality \| Slutsky matrix norm \| Revealed preference approach \| Bounded rationality

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Type of publication:	Article
Type of publication (narrower categories):	Article
Language:	English
Other identifiers:	10.1007/s13209-018-0178-0 [DOI] 1049141725 [GVK] hdl:10419/195280 [Handle]
Classification:	C60 - Mathematical Methods and Programming. General ; D10 - Household Behavior and Family Economics. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10011994625